BUFFALO, N.Y. (WIVB) – The City of Buffalo is dipping into a not-so-well-known account to pay some of its bills.
“Instead of short term borrowing on the city side, (the council has) been told we were using board of education funds to avoid the interest costs,” said Councilman Rich Fontana, who chairs the Buffalo Common Council’s finance committee.
A city official told News 4 that those funds come from an account that was enabled by state legislation, and enables cash flow for both the city and Buffalo Public Schools. The money comes from New York State balloon payments.
Fontana estimated the city has used about $25 million of that money in recent months.
“It’s better to use funds that are around the building than to go out and borrow money and expense all of that interest,” he said.
The city’s unassigned fund balance, which can be defined as money free for general use, has been depleated. Since 2013, it has dropped from $63.9 million to nothing.
“We have cash flow problems,” former city comptroller Mark Schroeder told News 4 in May 2018. “We’re going to have difficulty paying our bills.”
Much of the city’s financial picture can be defined by a dispute over casino revenue between the Seneca Nation of Indians and New York State. It’s been more than two years since the nation made its last payment.
In any event, Fontana says the situation needs to be addressed.
“The more you have a negative cash flow situation in your own personal house, the worse it gets down the road,” Fontana said. “So I think spending should be lessened. I think our revenues have to be either increased or spending has to be decreased.”
Both Fontana and the city official stressed that the city’s budget is balanced.